If you pay $100 a month on $5,000 worth of credit card debt, with an 18 percent interest rate, it will take you seven years and nine months to bring the balance to zero. That $100 could be going toward something else every month, such as a down payment on a new home, or your kid's college education. If you're funding a night out at the pub or your grocery bill with your credit card, your first step to get out of debt is to sit down and have a serious talk with yourself and -- if applicable -- your spouse.
"You need a serious attitude adjustment!" Most everybody has heard those words before. It was probably a harsh judgment, especially if it was coming from your sixth-grade math teacher. If, however, you received this assessment in relation to your credit card debt load, it might have merit. If you're charging things like Cheetos and hair spray, you're likely paying for them long after they've been consumed. Not good. As M.P. Dunleavey notes in The New York Times, before you crunch the numbers to become debt free, you need to commit to a debt-free lifestyle. You can't create a budget and stick to it without developing some will power.
Tally up your income sources. Do the same with your expenses. Include your debt in the equation. While many people focus on credit cards as the main problem, assess all of your debt. It could be that your car payment, student debt, mortgage or personal loans are what is really keeping you down. In any case, you'll attack the situation in pretty much the same way.
Develop a plan to tackle your debt. Radio host Dave Ramsey advocates the snowball method. He advises paying off your smallest debt first. Ramsey claims that by showing early success, you'll build momentum and have the needed kick in the pants to persist. Others suggest hitting the credit card or loan with the highest interest rate, or highest payment, first. Regardless of the scheme, it makes sense to do at least one thing Ramsey says -- take the payment used to pay off the first debt, and add it to the standing payment on the next debt on your list.
Make it automatic. This is an age-old investing tip. If you have money taken from your paycheck or bank account before you see it, it's easier to part with it for another purpose, be it investing or paying down debt. Set up automatic bill pay with your creditors. This method also helps to ensure that you won't miss a payment, which can result in blemishes to your credit score and report.
As a writer since 2002, Rocco Pendola has published numerous academic and popular articles in addition to working as a freelance grant writer and researcher. His work has appeared on SFGate and Planetizen and in the journals "Environment & Behavior" and "Health and Place." Pendola has a Bachelor of Arts in urban studies from San Francisco State University.